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Sep 23, 2020
The Moody's CMBS Delinquency Tracker total delinquency rate edged down 22 basis points to 7.73% in August. Delinquencies improved thanks to forbearance and other loan modifications. The subcomponents were mixed in August, though. Office and retail declined while the rest of the subcomponents remained unchanged or increased. All regional scores decreased except for the West. Delinquency rates will remain elevated in the short term.
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Sep 22, 2020
Existing-home sales advanced 2.4% in August, adding to June's and July's sizable gains and reaching their highest level in 14 years. Pent-up demand for housing continues to be released as homebuyers regain their confidence and take advantage of multigenerational lows in mortgage rates. Single-family and condo/co-op sales both rose, increasing 1.7% and 8.6%, respectively. Moreover, sales were upbeat across all census regions, and the Northeast registered double-digit gains.
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Sep 22, 2020
The manufacturing recovery in the Richmond Federal Reserve District accelerated in September, according to the Fifth District Survey of Manufacturing Activity. The composite index increased 3 points to 21. Volume of new orders increased as local business conditions improved, but supply-side constraints caused shipments to moderate. To meet growing demand, factories increased hiring and workers are averaging longer workweeks.
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Sep 18, 2020
Having fully recovered to pre-pandemic levels, Canadian retail resumed a slower pace of growth in July. Retail sales edged up by 0.6% in July to C$52.9 billion after the prior two months' V-shape recovery. Motor vehicle and parts dealers, gasoline stations, and clothing and clothing accessories stores led the increase while building material/garden equipment and supply dealers and food and beverage stores saw dips in sales. In volume terms, retail sales increased by 0.4%.
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Sep 17, 2020
The U.S. housing market has been red hot, but it appears to have cooled some in August. Housing starts fell 5.1% to 1.416 million annualized units, weaker than either we or the consensus anticipated. The volatile multifamily segment accounted for all the weakness as starts dropped 22.7% to 395,000 annualized units. Single-family housing starts rose 4.1% to 1.021 million. This is the fourth consecutive monthly gain in single-family starts. Housing permits slipped 0.9% to 1.47 million annualized units, but the decline was attributed to multifamily. Low mortgage rates and pent-up demand will support housing, but homebuilders are grumbling about supply constraints and surging costs.
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Sep 16, 2020
Net long-term capital flows were positive for the third straight month in July. Net inflows totaled $10.8 billion, following revised inflows of $113 billion in June. Foreign residents were net sellers of $26.7 billion worth of long-term U.S. securities in July, compared with net purchases of $78.8 billion in June. Private foreign investors were net sellers of $20.8 billion while official foreign investors reduced their holdings by $5.9 billion. U.S. residents contributed to capital inflows, decreasing their holdings of long-term foreign securities by $37.5 billion.
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Sep 16, 2020
Homebuilder confidence reached a record high in September. The NAHB Housing Market Index increased to 83, 5 points more than the August value. The continued upward trend and the index being firmly above the 50-point threshold indicate more builders view conditions as good than poor. The subcomponents and regional scores increased this month.
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Sep 16, 2020
Business inventories rose in July, though by less than expected. The inventory build increased by 0.1% from June. Among the categories, manufacturing inventories contracted 0.5% while retail grew 1.2%. The total business inventory-to-sales ratio was 1.33, down from 1.39 in July 2019.
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Sep 16, 2020
The recovery in retail sales, like many other measures of economic activity, has slowed, although in this case it is at least in part because the recovery is nearly complete. Retail sales grew 0.6% in August after increasing a downwardly revised 0.9% in July and soaring 8.6% in June and 18.3% in May. Sales were 2.6% above their year-ago level and 1.9% above February's level. Vehicle dealer sales changed little despite the dip in new-vehicle sales. Core sales rose 0.7%, with growth led by restaurants as well as apparel, furniture and building supply stores. Department stores, grocery stores, sporting goods and hobby stores, and other general merchandise stores posted declines for the month.
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Sep 14, 2020
Our estimate of global consumer price inflation was unchanged in August at 3.7% y/y. Whereas the inflation rate sped up to 0.8% y/y in developed economies, from 0.7% a month earlier, in developing economies it slowed to 5.2% from 5.3%. The outlook for global inflation is to the downside. Although supply chain disruptions, a defining feature of the COVID-19 crisis, typically lift prices, the global pandemic's sharp hit to global demand and to commodity prices (notably oil) is taking the upper hand. As a result, underlying inflation pressures will remain weak this year.
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Sep 08, 2020
The NFIB Small Business Optimism Index increased 1.4 points in August to 100.2. This follows July's 1.8-point decline. Seven of the index's 10 components improved from July to August, while two declined and one did not change. Though small-business owners' outlook improved, the NFIB's Uncertainty Index rose to 90, the second-highest reading since 2017.
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Aug 31, 2020
Businesses across the globe remain pessimistic. Although not as worried as they were at the start of the pandemic in the spring, businesses have become more wary since mid-June. Businesses are especially dour with regard to investment and pricing, both of which are near all-time lows. Demand for office space also remains notably weak. Businesses do not believe the economy will experience a V-shape recovery, and the sentiment survey is consistent with a global economy that is struggling to grow.
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Aug 31, 2020
The probability of the U.S. being in recession in the next six months fell from 77% in May to 52% in June. The National Bureau of Economic Research, the de facto arbiter of the business cycle, has said the economy is in recession. However, the recession has likely already ended, as the reopening of states' economies has caused an initial bounce in economic activity over the past few months. Employment, industrial production, retail sales and housing starts have risen to various degrees. Recession risks remain elevated because the path of the economy depends on the virus. Also, fiscal lawmakers have erred by not passing another round of stimulus sooner.
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Aug 31, 2020
After rebounding from the pandemic-related shutdowns, the rate of new construction intentions has stabilized a little short of precrisis levels, primarily a function of depressed nonresidential permits. Total building permits fell 3% in July, down 9.6% compared with the prior year. A modest decline in residential permits more than offset a marginal increase on the nonresidential side. However, half the surge in commercial permits resulted from plans for a new Amazon distribution center in Ottawa.
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Aug 28, 2020
Wholesale inventories fell 0.1% from June to July. They sat 5.4% below year-ago levels. The slight reduction follows June's revised 1.3% decline. Retail inventories grew 1.2% though remain 11.2% lower than July 2019 stockpiles. Motor vehicles and parts dealers accounted for most of the increase in retail inventories - growing 2.5% from June to July.
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Aug 19, 2020
The minutes from the July 28-29 meeting of the Federal Open Market Committee show the central bank is moving closer to adjusting its forward guidance, while the minutes suggest support for yield-curve control is still lacking. The minutes noted that refining the statement could be helpful in increasing the transparency and accountability of monetary policy. Such refinements could also facilitate well-informed decision making by households and businesses, and, as a result, better position the Committee to meet its maximum-employment and price-stability objectives. Elsewhere in the minutes, consumer spending was noted as rebounding strongly because of the fiscal stimulus. Since the meeting, the additional unemployment insurance benefits have been cut, dampening the outlook for spending.
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Jul 29, 2020
The labor market was performing well prior to the pandemic. In the fourth quarter of 2019, the labor market created 7.8 million jobs, up nearly 500,000 from the previous quarter. Job creation had held fairly steady for the second half of the last decade. Job losses fluctuated more, declining to 7.0 million at year's end. Hence, on net, the labor market generated nearly 800,000 new private-sector jobs during the fourth quarter.
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